Gross profit margins are expected to average about 30 percent each year. As of relatively high marketing expenditures aimed at gaining market share, firm is expected to suffer net losses for two years. marketing and other operating expenses are evaluated to be $3 million in 2006 and $5 million in 2007. Though, in third year operating cash flow breakeven must be reached Net profit margins are expected to average 10 percent per year starting in year 3. Asset inensity or turnover is expected to average about two times per year.
Learningbeeam evaluates that venture investors must earn about 40 percent average annual compound rate of return.
Total market for children's entertainment is evaluated to be $35 billion annually.
Toys account for about $20 billion in annual spending. Summer camps are evaluate to generate $6 billion annually. This is followed by kids videos and video games at $4 billion each. kids'software sales recently generate about $1 billion per year in revenues and industry sales are expected to grow at the 30 percent annual reate over next several years.
Learningbeam has made follwing five-year revenue projections:
2006 2007 2008 2009 2010
$1.0 $9.6 $30.1 $67.8 121.4
Revenues($M)
How to compute year to year annual sales growth rates for Learningbeam and evaluate compound growth rate over 2006 and 2010 time period? How do evaluate learnighbeam's expected market share in each year based on given data? and how evaluate Net income loss in each of five years? and evaluate firm's return on assets beinning when net or after-tax income is expected to be positive.